GS 3: EconomyGS 2: Governance

On quality control orders, a welcome regulatory reset, Pg10

India scraps mandatory quality control orders on industrial raw materials, easing compliance for manufacturers and boosting competitiveness in global markets.

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Key Highlights:

  • India has withdrawn Quality Control Orders (QCOs) on a wide range of industrial raw materials, marking a significant regulatory reset.
  • The move acknowledges industry concerns that mandatory certification is unsuitable for low-risk, widely traded inputs.
  • NITI Aayog's report highlighted the growth of QCOs from 70 to over 790, encompassing even low-risk materials.
  • The withdrawal, notified on November 13, removes compulsory BIS certification for 14 chemicals and petrochemicals products and six mines ministry products.

Detailed Insights:

  • The previous approach of mandatory certification for raw materials led to fewer sourcing options and higher input prices for Indian manufacturers.
  • MSMEs particularly faced challenges due to paperwork, delays, and limited BIS testing capacity, affecting export-oriented sectors.
  • Major manufacturing economies like the EU and US primarily apply conformity requirements to finished goods, managing intermediate inputs through voluntary standards.
  • The rollback aligns India's standards regime with global practices, regulating high-stakes products while allowing market mechanisms for bulk raw materials.
  • This decision provides breathing room for industries targeted under the PLI schemes, such as electronics, specialty steel, and technical textiles.
  • A risk-based framework will enhance the credibility of quality enforcement, focusing on areas with consumer or public-safety implications.
  • The government should invest in expanding testing capacity, speeding up certification timelines, and conducting impact assessments.

Key Concepts Involved:

  • Quality Control Orders (QCOs): Mandatory certifications intended to ensure product quality and safety standards.
  • BIS Certification: A certification scheme by the Bureau of Indian Standards ensuring products meet specified standards.
  • PLI Schemes: Production-Linked Incentive schemes aimed at boosting domestic manufacturing and exports.
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